FARMERS' MEAT WORKS.

Poverty Bay Herald, Volume XLIX, Issue 16211, 23 August 1923, Page 5

FARMERS' MEAT WORKS.

A. WAIRARAPA CONCERN

NEW COMPANY TO BE FORMED

(per Tress Association.) MASTERTON, last night. Three hundred shareholders attended a private meeting of the Wellington Farmers' Meat Company to receive the report of the investigation committee on the company's affairs. The meeting was lively throughout, the directors being severely taken to task. Afterwards the annual general meeting was held, Mr. Hugh Morrison, chairman of directors, presiding. Further lively exchanges wore experienced when the meeting adjourned to hear the reconstruction proposals. Mr. W. Perry, now chairman, explained that the Bank of New Zealand had a receiver in and was practically running the concern. The bank offered to sell for £150,000 and it was proposed that a farmers' company buy or lease the woi'ks.

Mr. W. D. Hunt, general manager, of Wright, Stephenson, and Co., outlined a proposal of reconstruction, suggesting fchat a new company lease the works at £7500 per annum with a purchasing clause. The sum of £150,000 capital was required and Wright, Stephenson, and Co. were prepared to subscribe onefifth of the capital up to £150,000. That. in, of the first £50,000 necessary to commence, his firm would subscribe £IO,OOO. An output of 400,000 sheep woidd be necessary annually to show a profit over overhead and operating expenses. He appealed to business men to support the scheme.

Mr. W. Perry's motion to form a newcompany in which the Bush and Wairarapa districts would be largely represented, was carried. The annual meeting was then resumed.

Mr. Morrison's motion to liquidate owing to the unsound state of finance, was carried, and Mr. H. E. Davis, was appointed liquidator. A provisional directorate, half farmers and half business men will be set up. The report of the investigation committee was received and adopted. ATTITUDE OF BANK EXPLAINED. The Wairarapa Age, prior to the meeting, obtained a special interview with the general manager of the Bank of New Zealand upon its relations with the Wellington Farmers' Meat Company, Lid. Masterton. The journal reports:It having been stated that the Bank of New Zealand has forced the Wellington Farmers' Meat Company into liquidation, and that it does not want to .see the copv pany reconstructed, we have made in : quiries on those points from the authorities of the bank, who reply that there is no foundation for either report. The bank states that "it became patent to them as far back as early in , 921 that the widening of the scope of the company's activities rendered it necessary that a considerable addition to the capital should be made; and the bank, therefore, requested the company to issue an additional £150,000 of capital. Unfortunately, owing to the slump conditions then prevailing, the company considred it useless attempting to raise further capital, or even to get in- the existing uncalled capital. "When the recent dissensions amongst the company's directors became known to the bank, the bank intimated that the liberal assistance rendered to the company during the period of the commandeer and the times of stress that followed must bo" curtailed, and that the company would in future have to rely more oh its own Tesources and less on "the bank's.

THE DEPOSITS. "The necessity ,for repaying deposits due, under the moratorium, on 30th June last, brought matters to a head, the bank positively refusing to find money for that purpose. This, of course, meant that if the company could not arrange with its depositors liquidation was inevitable, but that was a matter between the directors and the depositors, and no concern of the bank's. In fact, early in 1921, before the Moratorium on Deposits Act was passed, the bank had refused to find money to repay deposits, so that the directors of the company had full, knowledge of the hank's attitude, and should havo shaped their course accordingly. "So far from the bank not desiring reconstruction of the company, several leading residents of the district having asked the bank if it would agree to lease the works to a new company for one year, the general manager had replied that he would recommend his directors, who meet'on Friday next, to grant such a lease, although the rent, offered is much less than the real rental value of the works based on the business being carried on with ordinary ability and care.

"The bank never interfered with the conduct of the company's affairs, relying on the high standing of the directors and the auditors of'the company to see that the business was-properly conducted, and that the balance-sheets accurately set forth the position of tho company. The committee that was recently appointed to investigate the differences between the directors of the company, and Hie conduct of its affairs, has completed its labors, so that, if there is nothing to hide, no doubt tho committee's report will be published for tho information not only of the shareholders, but of tho creditors of the company and the public as well. NO INSIDE INFORMATION.

"The bank had not the inside information regarding tho company's affairs that was available to 'the directors and. the auditors. Nevertheless, owing, to the mider-capitalisation of tho company arising from its incursions into ventures foreign to tho purposes of a freezing company, and the improbability of the ;ompany being able to meet its deposit .iabilities, the bank some time ago, as a matter of prudence, made ample provision for any probable loss on the account, ft may suit some persons to endeavor to place the blame for the present position of the company's affairs on the shoulders 'of the bunk, but the latter has nothing to'reproach itself with save having placed confidence in the management of the undertaking. "Those shareholders of the company who have also been sellers of live stock can have little cause for complaint that their share capital has been lost, for there is little doubt that the operations of the company kept up. tho value of sheep and eattie to the highest possible figure. A close investigation of the company's buying operations during the last few years would doubtless disclose that tlio major portion of the company's losses resulted from paying far more for stock than the actual value."